Milk Prices

Rather surprisingly the UK average farmgate milk price for May fell (by 0.27ppl) for the first time since the start of the year to 29.82ppl.  All the signals seemed to indicate that this benchmark measure would keep rising, but it seems that seasonality adjustments have pulled prices down for the month.  However, competition for milk is expected to remain high; although production has started to pick up (see milk production article) processors are looking to rebuild their stocks.  There has been a number of price increases announced again this month.

Dairy Crest has announced a 2ppl incentive bonus to its Davidstow suppliers on all additional litres produced above their 2012/13 production once a 2% trigger is hit.  It has also announced its Davistow cheese producers will receive a 1ppl increase as fom 15^th July to 32.25ppl.  The Davidstow price has increased by 3.25ppl since the turn of the year making its price the highest cheese milk contract in the UK.  Other prive increase include:

• Direct suppliers to Belton Cheese, Glanbia, Helers Cheese, Parkham Farms and South Caernarfon Creameries will all receive a 1ppl increase as from 1^st July.
• First Milk cheese contracted producers will receive an increase of 0.6ppl from 1^st July and a further 0.5ppl from 1^st August
• Sainsbury’s quarterly cost tracker price direct suppliers will receive a 0.13ppl increase from 1^st July.

With all the increases, farmgate prices are expected to rise and reach a record high in July.